working for Australians in retirement

SUPERANNUATION TAPER RATES ARE CHANGING

The proposed action by the Federal Government to increase the age pension taper rate from $1.50 to $3.00 per $1000 has reduced the asset test threshold down to $820,000 approximately for couples effective from 1 January 2017.

The proposed changes are punitive to those partially self-funded retirees who currently qualify for a part age pension. In fact, it has created a poverty trap for those with income producing assets (including super) in excess of $820,000 and less than $1.3M.

For self-funded retiree couples about $1.3m is required to equal the income of a full age pensioner couple. A similar comparative situation applies to single and non-home owner retirees.

The changes now proposed by this Government reverse this situation that was established by the Howard Government.

The proposed action by the Government will create a new poverty trap for the average self-funded retiree.

 

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